Tax reduction aims at boosting service trade

China attempts to increase the service and merchandise trade by facilitating access for overseas companies and by providing a tax reduction for technology providers.

China attempts to increase the service and merchandise trade by facilitating access for overseas companies and by providing a tax reduction for technology providers. This topic was one the main points at the first State Council executive meeting after the Spring Festival holiday. Opening up the service market and developing the service sector is crucial under the prevalent circumstances.

Tax Reduction to Boost Trade in Services

China’s imports and exports of merchandise faced a shortage last year due to a weakening export demand and rising domestic wages. Many foreign companies, particularly with regard to various service industries, are striving for greater access to the Chinese market. The tax system in China is very comprehensive. 25 common types of taxes are currently levied on enterprises or individuals; some are of common nature but several are only imposed on very specific goods or services. China tries to establish a tax system, which is more sophisticated and standardized for the high end and international clientele. For more information’s about the Chinese tax system please read the interview of Grace Shi with taxlinked.net.

To accelerate the development of the service trade can help China generate new GDP growth and employment at a time. For this, China has to close a number of companies with excess capacities, such as the steel and coal industries. The conference decided to set up pilot programs in ten cities along with five national-level new investment areas. They shall ensure an easier access, as well as more convenience to oversee enterprises. Furthermore, China pledges to show flexibility in administration and diverse development models.

The cities chosen for the pilot programs are Shanghai, Tianjin, Shenzhen, Guangzhou, Hangzhou, Suzhou, Hainan, Wuhan, Chengdu and Weihai (Shangdong province). The national-level investment areas are Harbin in Heilongjiang province, Jiangbei (Nanjing), Liangjiang (Chongqing), Guiyang-Anshun (Guizhou), and Xi’an-Xianyang (Shaanxi).